Oil prices surge to three-year high reaching close to $70 a barrel

On Wednesday, the price of Brent crude oil has been reported at $69.37; this has brought good news for oil producers after a gap of three rough years.

In November, OPEC and other major oil producers including Russia had agreed to extend production restrictions until the end of 2018, which together with geopolitical indecisiveness, has pressed the oil prices.

The price of Brent crude per barrel hit $69.37 on Wednesday; it is the highest value since December 2014. These milestones won’t be digested by OPEC members, since they fear losing market share to shale producers from the United States. According to Iran’s oil minister, OPEC does not want the price to surge more than $60 a barrel.

Considering the situation now, shale fracking drillers in the U.S. are back at work since the price is now high enough to validate the investment. This is the time when they can swiftly push up production. Further, the U.S. government's energy forecasters have pushed up their prediction of production by almost four times in the past few months.

Considering the situation in U.K., the RAC stated the price of petrol had risen by 5p per litre after November, to reach 121.27p, whereas diesel by 3p to acquire a mark of 123.97p.

Simon Williams, RAC’s fuel spokesman said, “If oil stays at this level, pump price hikes will be almost inevitable. With households across the country still feeling the cost of Christmas, this is not the start to 2018 anyone would have wanted. It could also negatively affect business and further fuel inflation”.

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